Chancellor: Mortgage payers affected by coronavirus offered three-month payment holidays

Mortgage lenders have agreed to offer customers three-month payment holidays if they suffer from financial issues due to Covid-19, Chancellor Rishi Sunak has announced.

A number of high street lenders had already pledged to help customers in need.

Rishi Sunak, The Chancellor of the Exchequer, said:

“We will do whatever it takes to protect our people and businesses from the effects of this global economic emergency brought on by the Coronavirus pandemic.

“The interventions I am setting out today will help support businesses of all sizes – so they can continue operating during these unprecedented times.”

Stephen Jones, chief executive of UK Finance, said:

“Mortgage lenders will support customers who are experiencing issues with their finances as a result of COVID-19 and the options include a payment holiday of up to three months.

“Monthly mortgage payments tend to be the largest outgoing for the vast majority of households and lenders are keen to reassure homeowners that the industry is working hard to put measures in place to support them during these uncertain times.

“Customers who are concerned about their current financial situation should get in touch with their lender at the earliest possible opportunity to discuss if this is a suitable option for them.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said:

“A three-month holiday for mortgage holders who suffer financially as a result of coronavirus will be welcomed by many who have been worried about their jobs and how they will pay the mortgage.

“There is so much uncertainty that knowing the mortgage, which is most people’s biggest outgoing, will be paid, will remove a significant burden.

“The same is true for those struggling to pay their rent. Speak to your landlord as soon as you can – he or she may be able to apply to their buy-to-let provider for their own payment holiday if otherwise they would struggle to pay their mortgage should you fail to pay the rent.”

He added:

“Lenders tend to be reasonably sympathetic to any illness that affects a borrower’s ability to pay their mortgage, whether it’s coronavirus or something else.

“They may ask for evidence that you are unwell but the message to borrowers, particularly the self-employed who are most likely to be affected in terms of their income, is that anytime you are struggling to pay your mortgage, get in touch with your lender.

“Don’t bury your head in the sand and hope the problem will go away – it won’t.”

Harris went on to say that some lenders have payment holidays longer than three months. As it stands interest will still be calculated over the period of the payment holiday and then added to the loan along with the repayment part of the payment. After that the monthly cost could go up one you resume payments.

Harris added that borrowers should keep note of conversations with have with lenders, just in case a payment holiday is incorrectly marked as arrears, which would impact their credit rating when they come to remortgage.

Kindly shared by Property Wire